Monday, July 06, 2009

Note To UFAs: Money Gone

I'm not sure I believe that Alex Kovalev used the Canadiens offers as bargaining chips with other teams or not. While it doesn't seem that far-fetched, it seems strange the Kovalev was being offered a raise.

Whatever happened, Alex can't be feeling too good about himself right at this moment in time. For one thing, the big buyers have moved. For another, Brian Gionta has taken his fortune in Montreal.

But this story isn't Kovalev's alone. This is the story of every UFA who waits for lazy GMs to return from their boozy holiday weekends. It is Saku Koivu's story, it is Alex Tanguay's and perhaps to a much greater extent, all those players reaching UFA contract status, while keeping the replaceable tag.

There have been a trough-full of articles these past few days about the cap space available to each NHL team and how they might accommodate the remaining players. But none was so intelligent and insightful as this one by James Mirtle. I say that, because Mirtle's is the only article that treats the critical issue with team budgets in mind. How could you forget team budgets Montreal? They almost got you that guy you've all been salivating over for the past 11 years.

Mirtle does some straightforward calculations using the very fair and realistic estimate that was last season's spending. It's very interesting. And it should interest Montreal fans. That's because even with 3 contract albatrosses, the Habs sit at #5 in the estimated remaining funds to spend to their budget cap.

Montreal still a bigger player

Keeping in mind that this was written on Friday, Montreal had (according to calculations) an estimated $7,964,000 to spend with at least 5 roster openings. The teams ahead of Montreal included the Rangers and Devils with $13m and $11m at the time. But both teams actually have more players to sign than Montreal to ice a team, and so may not be able to compete on the open market. The other two teams, the Islanders and Vancouver represent competition.

While the looming RFAs must be considered too, Montreal really only has Plekanec who can come anywhere close to claiming a raise. New Jersey and New York have issues of their own there too with Zajac and Zherdev heading their respective lists.

Remaining money scarce

Just telling you that Montreal should be one of the big spenders left should tell you a lot. It should tell the remaining free agents something too: their money and their luck may be running out.(Thanks Brian Gionta)

James Mirtle estimates that teams will probably be spending in the neighbourhood of $147 million. It sounds like a lot but spread over 30 teams it's not even room for Tanguay's salary last year. While James alludes to it:
"The average NHL club has between three and four free agents to lock up still and about $5-million to do so, so we're likely looking at a lot of smaller moves. None of the players left as UFAs should expect huge paydays, however, as we'll get down to fighting for table scraps rather quickly."

I did some calculations of my own. Simply put, I used a list of UFAs with 2008-09 salaries on it. I then tallied up all the salaries of the people I would consider NHL regulars or potential regulars. I even removed Fedorov, Kozlov and other defectors for good measure.

The story my calculations told is that UFAs alone, if they are all asking for raises will be looking for more than $180 million this summer. Quite right, they'll be fighting for scraps. Particularly since many teams have now turned their focuses to restricted free agents who promise to figure in their plan for much longer.

It's a lesson to future free agents: you'd better be darn sure about your leveraging, because before you know it, Spacek, Gionta and Gaborik will have pinched your change.

Pay reduction

The limited money around will certainly mean that many players have to take a significant paycut (Francis Bouillon is someone who springs immediately to mind here).

And those that are quickest to accept that reality will be the ones with an NHL career after this summer. Those with big salary demands will be left out in the cold as younger players who can do their jobs almost as efficiently will filter through to be paid minimum wages.

Paradoxically, those veterans willing to take massive pay cuts should quickly become the next most valuable group of free agents as teams look to fill holes with affordable pieces. Someone like Bouillon, who looks a disaster at $2.5 million, quickly takes on a shine as his demands creep below $1 million. In fact, it would be an interesting dynamic to have veterans with such low cap hits later in the season when trades are happening left, right and centre to get anyone on board who's played a playoff minute or two.

3 K's: Koivu, Kovalev, KHL

As this affects two of my favourite players, it was of particular interest.

I think Koivu may be the best positioned of all the remaining free agents, because as many people who have been saying, veteran centres who step up their game in the playoffs are useful commodities, no matter their age.

Kovalev, on the other hand may have played himself into a corner here. I think even he'd admit that matching the Habs offer on the market now might be tricky. It seems Kovy may have stickhandled himself into a defender at the blueline again.

As with the marginal millionaires, it may get interesting if Koivu, Kovalev and any other fading stars suddenly drop their asking prices. And, before Gainey says all his adieus, I'd warn him to keep that in mind. Yes Kovalev at $4.5 million now is impossible. But instant PP proficiency for a couple of million should not be sneezed at. Similarly, the chance to start a centre like Koivu in a depth role for a budget – only a bad manager would pass the chance up.

The same of course goes for Tanguay, who must be thinking hard about getting a new agent by now.

Unfortunately for NHL fans, the benefactors of salary slippage in North America could once again be the KHL. While the Russian league doesn't boast the standard of North American play, it does boast the same top salaries. What's more, the league – actively engaged in trying to usurp NHL audience – will be only too willing to sweep up stars left out in the cold by imprudent contracts of the past.

The next few days should be interesting indeed. Perhaps not the frenzy that TSN promises annually on July 1, but in some ways much more definitive for the league as we know it.

Will low budget teams break their own limits?

Will UFAs smell the cash running out?

Will the Russians land their largest sucker punch yet?

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